If you ask the analysts at Zerocap, Bitcoin is currently difficult to predict. According to them, Bitcoin could drop to $53,000, but also rise to $65,000 after the next interest rate meeting of the US central bank.
67% chance of jumbo rate cut
According to Jonathan de Wet of Zerocap, there is now a 67% chance of a jumbo rate cut. That is, a rate cut of 0.50% instead of a rate cut of 0.25%. According to him, that has already contributed to Bitcoin’s short rally to the $60,000 level.
Despite this, according to De Wet, it is difficult to predict the Bitcoin price. Especially because of the uncertainty about the impact of the interest rate cuts in the short term, which is only made more difficult by the upcoming American elections.
“We see a downside target of $53,000 for Bitcoin after the recent lows, with an upside target of $65,000 […]“However, it is difficult to predict the direction until we get closer to the elections, but risk-on conditions should lead to positive sentiment in the short term,” De Wet said.
Bitcoin is currently trading at $58,000, after spending the weekend above $60,000. According to De Wet, this positive price action is mainly due to the robust CPI and PPI inflation data from last week.
Good for risk assets
The fact that the US central bank is about to start their cycle of rate cuts is bullish for risk assets (and therefore also for Bitcoin), according to De Wet. Ultimately, however, it depends on the development of the macroeconomic situation in the United States.
Will the US economy hold up? In theory, it would be bullish for Bitcoin. But what if the economy crashes and we still end up in a recession? Then it remains to be seen to what extent the interest rate cuts (in the short term) are bullish for the digital currency and other risk assets.
There are also analysts who are mostly bearish and point to 2001 and 2007. Back then we also got interest rate cuts, but they were meant to end a recession that had started. That is not the case now, or so it seems.
Source: https://newsbit.nl/bitcoin-koers-is-lastig-te-voorspellen-richting-rentebesluit-amerikaanse-centrale-bank/
